Indonesia approves revised plan of development for Abadi LNG Project: INPEX

Japan's INPEX said Dec. 5 it has received a written approval from the Indonesian government for the revised plan of development for its operated Abadi LNG Project, and it aims for a final investment decision and production startup "at an early stage" after completing marketing and financing activities.

The approval came after INPEX submitted April 4 a revised POD for the Abadi LNG Project, incorporating a carbon capture and storage component, to the Indonesian government and plans to revise the production sharing contract to reflect incorporation of CCS following approval of the POD.

The approval of the revised POD paved the way for INPEX and its partners to fully mobilize the Abadi project as a clean project, said INPEX, adding that the company and its partners will pursue the revision of the PSC to incorporate CCS into the contractual scope of work and resume project operations including on-site activities and prepare for front-end engineering design work.

INPEX earlier said that an FID was expected in the latter half of the 2020s with Abadi LNG production starting in the early-2030s, although senior Indonesian government officials have said that they expect the project to start production at the end of 2029.

Pertamina and Petronas also took over Shell's 35% stake in the Masela block Oct. 18. Pertamina owns a 20% participating interest in the Masela PSC, while Petronas owns 15%.

Nonbinding deals

INPEX has signed letters of intent with prospective LNG customers for its Abadi project in Indonesia amid strong interest in Asia, as it aims for a final investment decision in about two years following the start of FEED process, President and CEO Takayuki Ueda told S&P Global Commodity Insights in September.

In an interview with S&P Global on the sidelines of the Gastech conference in Singapore, INPEX aims to "enter the FEED in around mid-2024, or by the end of next year at the latest" upon securing an approval from the Indonesian government on a revised plan of development for the Abadi project, said Ueda, adding that it "expects to reach the FID in about two years since the start of FEED."

"We will need to work on arranging finance, finding buyers and working on detailed design works in parallel during the FEED phase because we would not be able to make the FID without securing long-term [LNG supply] contracts and subsequent finance," Ueda said.

When asked to comment about the progress of Abadi LNG marketing, Ueda said: "While we will work on full-scale marketing with FID in parallel, we have had nonbinding [agreements], or what we call LOI with our potential customers."

"There is extremely strong interest for Abadi, especially from buyers in Indonesia, Southeast Asia on top of many including Japan and South Korea, of course," Ueda said.

"Although these are still nonbinding, we see significant volume interests."

The Abadi project, which is being developed in the Masela Block offshore Indonesia, is expected to produce about 9.5 million mt/year LNG at an onshore plant and pump up to 35,000 b/d of condensate. It will also supply 150 MMcf/d of natural gas by pipeline to the domestic market.

"Although there are [prospective] Japanese buyers of course, most likely we would be supplying a large volume to buyers in Asia, including from Indonesia," he said, adding that the company would work on turning the nonbinding agreements to "binding contracts" during the FEED phase.

Ueda said Aug. 9 that INPEX intends to review the Abadi project schedules after holding discussions with the new partners following a shakeup of the project.